Journal entries

John (Accountant) (66 Points)

25 October 2010  

Hi Guys,

PF employees contribution is a deduction in the salary. so this should be booked as a liability and not as expenses i believe. am i correct in this ?

i tried this journal

salary ac.  dr

To pf employees contribution(Liability)

but this makes salary as a profit and loss item and reduces the profit.

can anyone tell me the journal entry on how to book this as a liability.